Does your business need a bookkeeper to maintain your daily ledger, an accountant to improve your cash flow, or a CPA to perform an audit? Read this blog post to find out the unique roles that a bookkeeper, accountant, and CPA play and how they differ from each other.
Have you found yourself using the terms CPAs, accountants, or bookkeepers interchangeably? Should you employ the services of all three or would a bookkeeper suffice? What is the exact difference between hiring a bookkeeper, accountant, or CPA?
While it is true that all these three professionals can manage your finances and can work towards a common goal, the scope of their work varies. An accountant can provide an in-depth analysis of your financial transactions while a bookkeeper would record each transaction. CPAs on the other hand are certified accountants who would oversee your accounting functions.
Who does your business require for your accounting needs? Let’s find out.
The Bookkeeper
Making an accurate, consistent, and systematic record of an enterprise’s financial transactions on a daily basis is known as bookkeeping. A bookkeeper does not require formal training and performs duties like maintaining daily records, billing for products/services, entering transactions, paying suppliers, paying suppliers, making loan payments, creating invoices, handling payroll, and building financial reports. A bookkeeper would maintain a daily ledger in specialized software like QuickBooks. This would keep a record of all the outgoing and incoming revenue in an enterprise.
The Accountant
Accounting is quite similar to bookkeeping and many tasks that the accountant performs are similar to that of a bookkeeper. However, the role of an accountant is more analytical and complex in nature. An accountant would evaluate the financial data of an organization and offer financial advice on the company’s growth.
They would analyze the financial data of an enterprise to offer financial projections and advise on financial elements that affect the company’s growth. Their day-to-day tasks include filing income tax returns, calculating tax liabilities, providing tax advice, preparing financial statements, ensuring adherence to norms, spotting accounting discrepancies, creating budgets, and collaborating with auditors.
With the reports and insights prepared by the accountant, a business can get several financial indicators that would help them understand the areas that need improvement and the areas that generate profits. Accountants are needed to turn numbers from the excel sheets into statements that would help a business make better plans to reach their goals. When the key leaders of a business require assistance with tax filing, budget forecasting, or calculating tax liabilities, they would often turn to accountants.
The CPA
Accounting professionals who have passed the CPA exam and have higher level of accounting skills are known as CPAs. These resources are usually certified by a particular state and they assist businesses and individuals to prepare and file tax returns. CPAs are usually the first point of contact in the case of IRS audits. The day-to-day tasks of a CPA would include creating reports on transactions, updating records, performing detailed audits, and representing clients to the IRS. CPAs are given specialized training to maintain and keep a regular check on the financial accounts of individuals, enterprises, and government bodies. When compared to accountants, CPAs have better expertise and are more credible. They can help enterprises efficiently manage their wealth and attain their financial goals.
Which accounting professional should you choose?
If you want to manage your books and finances, a bookkeeper would be the ideal choice. A professional bookkeeper can manage your payroll, generate reports, reconcile accounts, and pay your bills. If you want to make the most of your reports and numbers, then an accountant would be the person you require. An accountant is the best resource for managing your taxes and improving your cash flow. However, an accountant would not suffice if your business transactions were tricky or if you need to face the IRS and you need a professional with more credibility. In that case, you can choose a CPA.
At Outsource2india, we are a one-stop destination for all your accounting requirements. From simple bookkeeping to advanced accounting, our team offers you with any accounting service that you require. Our team of professionals are not only trained and certified but also come with a wealth of experience in catering to the accounting needs of global businesses. Whether your business requires a bookkeeper, accountant, or CPA, we put you in touch with the best professionals in the industry. Outsourcing removes the hassles of hiring and training a team of in-house accountants, CPAs, and bookkeepers and puts you in direct touch with a skilled team of experts. Find out more on outsourcing accounting services and give your business a competitive edge!
Did you like reading this post? Who would you choose to hire and why? Let us know your comments in the box below. We, at Outsource2india, love to hear from you!
Interested to know more?
- 5 Questions to Ask before Outsourcing Bookkeeping or Accounting
- Why Your CPA Firm Should Outsource Bookkeeping?
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Hi, Very helpful indeed, Thanks for sharing such an informative blog regarding Accounting and bookkeeping services which will surely be a big help to the small-medium enterprise so that they can choose the best-suited tool for their business.
Thanks for updating this content. Clearly explain about bookkeeping, accountant, and CPA. It’s very useful for us.